Passionate about IP! Since June 2003 the IPKat has covered copyright, patent, trade mark, info-tech, privacy and confidentiality issues from a mainly UK and European perspective. The team is Eleonora Rosati, Annsley Merelle Ward, Neil J. Wilkof, and Merpel. Nicola Searle is currently on sabbatical. Read, post comments and participate! E-mail the Kats here

The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy

In addition, two trade mark cases are brought to readers’ attention by Tiina Komppa and Laetitia Lagarde: The Finnish “sealed” marks case (the decision is in Finnish) involving unfair business practice; and the EUTM FITNESS case focussing on belated evidence in EUIPO invalidity proceedings.

2. MARQUES Class 99 would like to draw readers’ attention to WIPO’s Seminar on The Hague System for the International Registration of Industrial Designs, at the headquarters of WIPO, Geneva, November 10, 2016.

3. What happened in Latin America? Patricia Covarrubia blogged on IP Tango a readable “conflict of hymns” between two football clubs from Mexico and Spain, discussing whether or not the “similar” song that caused “discomfort” is an infringement of copyright. Moreover, Patricia wrote another post about the national Technology Transfer (TT) plan in Peru, including her opinion on why IP matters for TT.

4. “It's a well-known myth that legal advice is unaffordable.” Is that so? Well, SOLO IP announced that the myth has been dispelled by Sean Dennehey and the IP pro bono scheme! For those who find themselves threatened or abused but don't have the resources to cope, the scheme provides professional supports from fully qualified members of the Chartered Institutes of Patent Attorneys and of Trademark Attorneys and the IP Lawyers Association. See more details here.

Meanwhile, Sally Cooper relates her story of being “horrified by European wisdom on the beauty care regime”, discussing the surprising position of beauty care products -- not regarded by the General Court as being fashion products!

5. Tibbie McIntyre writes in The 1709 Blog on a number of items, including Ed Sheeran et al’s lawsuit of his hit “Photograph”, the inapplicability of the doctrine of exhaustion of distribution rights in computer software for back-up copies, and Electronic Frontier Foundation’s urge for reforming the Digital Millennium Copyright Act’s pro-DRM provisions.

In the same blog, former GuestKat Marie-Andree Weiss brings readers her insights on the French law for a Digital Republic (Loi pour une République Numérique). In addition, the ever-productive Marie-Andree writes another post about French Representatives' discussions on the EU Commission Copyright Proposal. “This is only the start of the discussion”, she concludes, “stay tuned…”.

Friday, 28 October 2016

Call
for Papers: “Images, Copyright, and the Public Domain in the Long Nineteenth
Century.” This project brings together a range of disciplines to explore the cultural
and legal consequences of the proliferation of images in the long nineteenth
century. Interested scholars are invited to propose papers for a conference to
be held at Winterthur Museum, Delaware, March 29-30, 2018. Send your abstract and a short CV to
imagecopy19@gmail.com by 1st February 2017.

It's almost the weekend,
let down your tails and go wild...

Event:
Internet & Social Media Law 2016, 1
December 2016, Grange Tower Bridge Hotel, London. Thisconferencebrings you the latest updates and developments in light of such things as the Digital Single Market, the Investigatory Powers Bill, and the legal
implications of Brexit... some key sessions include:

Data
Protection and the Internet: Key Issues Across Europe

Investigatory
Powers and Law Enforcement on the Internet

The
Regulation of Advertising, Online Reviews & Endorsements

Internet
Content and Injunctions: To Block to not to Block?

For a
generous 10% IPKat discount use this secret code FKW82678IPK when registering.

Open Consultation: Section 73 Copyright Designs and Patents Act 1988. A government consultation has opened following the repeal of Section 73 of the Copyright, Designs and Patents Act 1998 [which provided that the retransmission of the Public Service Broadcasters’ core channels (all BBC Channels, ITV1, and Channel 4 and 5’s core channels) via cable were exempt from copyright fees.] The repeal of section 73 will change the relationships between PSBs, cable providers and rights holders, and a new rights market will emerge. So as a result of the outcome of the Balance of Payments consultation, this further consultation, which closes November 21, considers:

the potential future rights market

how copyright owners in underlying content in cable retransmissions may choose to administer their rights

whether transitional periods are required to help the market adapt to new licensing structures

...Just kidding

The Intellectual Property Law and Knowledge Management training is now open for registration.This annual event in Macau, China explores IP law as instrumental in the functioning of a competitive economy. Organised by the Institute of European Studies of Macao (IEEM) and Prof. Kamperman Sanders of the Institute for Globalization and International Regulation in Maastricht (IGIR), the training is suited for trainee lawyers, Intellectual Property professionals with an economic or policy background, and master's students in Intellectual Property.

New EPO Enlarged Board referral: does the gold standard apply to a bitten apple?Tufty the Cat brings us news on the latest EPO Enlarged Board referral in the appeal case of T 437/14, which considers if the “gold standard” test for assessing any amendment for compliance with A123(2) EPC must also be applied to the type of undisclosed disclaimers that would otherwise be allowable under G 1/03.

Society of Audiovisual Authors Video: Unwaivable
right to remuneration for audio-visual authors. New video
from the SAA on their view of the issue of fair remuneration for authors and
performers.

Is the use of non-compete clauses a matter of IP concern? And if so, is the IP profession adequately placed to deal with it? This Kat, as a

young lawyer in the 1980’s practicing in the State of Ohio (where US presidents are elected, when not watching Lebron James play basketball), remembers the principal issues connected with non-compete clauses, at least under Ohio state law: the scope of the restrictions, based on activity, territory, and duration; the ability to apply the “blue pencil” test, which meant that part of the clause could be modified to satisfy restraint of trade concerns without invalidating the entire clause; and whether payment of separate legal consideration to the employee was required in order for the clause to be valid. None of these concerns was specifically related to IP and innovation.

Fast forward to 2016, where we find the issue of increasing importance, at least in the US. This is so, primarily as a result of the interest shown by the Obama White House, starting with the Executive Order of April 15, 2016 (“Steps to Increase Competition and Better Inform Consumers and Workers to Support Continued Growth of the American Economy”), extending to the May 5, 2016 paper from the White House (“Non-Compete Agreements: Analysis of the Usage, Potential Issues, and State Responses”) and continuing this week, on October 25, 2016, in light of the publication of a White House FACT SHEET (“The Obama Administration Announces New Steps to Spur Competition in the Labor Market and Accelerate Wage Growth”).

The White House first recognizes that non-compete clauses may be of value, writing that --

“The main economically and societally beneficial uses of non-competes are to protect trade secrets, which can promote innovation, and to incentivize employers to invest in worker training because of reduced probability of exit from the firm. “

Interestingly, the value of non-compete clauses is tied to their ability to protect trade secrets (more on this point below). In the main, however, non-compete clauses are not connected with protecting valuable trade secrets. As noted—

“Only 24 percent of workers report that they possess trade secrets. Moreover, fewer than half of workers who have non-competes report possessing trade secrets, suggesting that trade secrets do not explain the majority of non-compete activity.”

As a result--

“Although non-competes can play a beneficial role when used in a limited way, evidence suggests that in certain cases, non-competes can reduce the welfare of workers and hamper the efficiency of the economy as a whole by depressing wages, limiting mobility, and inhibiting innovation. “

The White House especially describes the case against the value of non-complete clauses in facilitating the creation of IP and fostering innovation, at least within the high-tech cluster context. Thus—

“When firms in a given industry are clustered, it makes it easier for their workers to share expertise and discoveries, some of which may not be protected by trade secret or intellectual property legal provisions. Economists refer to geographic clustering effects of factors like a large, deep pool of skilled workers, a more competitive market of suppliers, and information spillovers across workers and firms as “agglomeration effects.”
While not necessarily in the interest of an individual firm, more rapid dissemination of ideas and technology improvements can have significant positive impacts for the larger regional economy in terms of innovation, entrepreneurship, and attracting more businesses and jobs to a region. Noncompetes that stifle mobility of workers who can disseminate knowledge and ideas to new startups or companies moving to a region can limit the process that leads to agglomeration economies. Overly broad non-compete provisions could prevent potential entrepreneurs from starting new businesses in similar sectors to their current employer, even if they relocate.”

This week’s White House Fact Sheet expresses concerns about the harmful effects of non-compete clauses more broadly, stating that--

“Across the country, businesses are eliminating non-compete agreements in favor of more targeted options. They are supporting a shift in non-compete policy because they recognize that fewer, more targeted non-compete agreements will likely increase their pool of available talent and improve innovation.”

What do we make of these pronouncements and the call for action on behalf of the White House with respect to reining in the use of non-compete clauses?

1. The expressed connection between non-compete clauses and trade secrets reinforces the conceptual conundrum that has plagued our understanding of non-compete clauses for decades: when does the legitimate, if any, restraint of trade, end, and where does the separate and distinct interest of protecting valuable trade secrets, begin? It is to be regretted that the White House report perpetuates this conflation of rights and interests.

2. What exactly is the rationale for continuing to give effect to non-compete agreements, once the issue of protecting trade secrets has been taken care of? The observation that there is a movement afoot for more “targeted non-compete agreements”, implying that the issue is merely one of degree, rather than of kind, sidesteps this question. Perhaps it is in the interests of re-starting the innovation engine to jettison non-compete agreements and focus on sharpening the distinction between an employee’s generalized skills, which are portable, and trade secrets belonging to the employer, which are not.

3. Should the IP community and its representative organizations be taking a more engaged position with respect to the use of non-compete clauses in the name of enhancing the creation and protection of IP? If so, training IP people in better dealing with this issue might need to become more front and center as an integral part of IP in-service training.

Thursday, 27 October 2016

“Words will be words, but sometimes words end up in litigation, quite often in connection with interpreting agreements. Recent cases in the Netherlands have dealt with nitty-gritty questions such as whether a clause imposing a penalty sum 'per product' is to be calculated 'per item' or 'per category'. Another case came to grips with the issue of what a 'reserved sector' in a patent license actually means.

In connection with a teaching project for patent attorneys, Alexander Tsoutsanis is now crowd- sourcing vague and ambiguous clauses in IP agreements, both of the contentious (i.e. cease-and-desist declarations and settlement agreements) and non-contentious (joint-ventures, licenses and the like) kinds.

All clauses will be anonymized, no reference to any contracting parties will be made and are solely to be used for teaching purposes. If such clause has been mentioned in a published judgment, a case reference would also be appreciated. Please submit any clauses immediately (before 28 October, if possible) to alexander.tsoutsanis@dlapiper.com.”

Is unauthorised linking to unlicensed content an act of
communication to the public within Article 3(1) of theInfoSoc
Directiveand, if so, a
potential copyright infringement?

Readers will
promptly recall that last month the Court of Justice of the European Union
(CJEU) addressed this very question in GS Media, C-160/15 [discussed here, here, here, here],and
concluded that - to answer - one must not only consider the
classic duo (1) act of communication + (2) to a public, but also "several complementary criteria, which are not autonomous and are
interdependent"[para 34].These, according to the CJEU, include whether the posting of
hyperlinks is carried out for profit and whether the person who posts the link
has knowledge of the unauthorised character of the content linked to.

All in all, the situation can be summarised (simplifying) as follows:

After GS Media, the question has become: how to
apply this CJEU judgment in practice?

In what appears to be the first national
application of GS Media, the answer comes from Sweden. On 13 October last theAttunda tingsrätt (Attunda District Court) - in the context of small claims
proceedings within Regulation
861/2007 - ruled against a Belgian media company for providing a link to avideothat had been uploaded onto YouTube[where it is still
available]without the permission of the copyright owner/claimant.

Someone (not Ms Jonsson) uploaded the video on YouTube. On 9 January 2012 the YouTube video was embeddedon the L'Avenir website run by the
defendant, in the context of an article describing the incident.

The claimant had neither
authorised the publication of the video on YouTube, nor its embedding in the L’Avenir
article.

In her action before the Attunda
District Court, Ms Jonsson claimed that L’Avenir had infringed copyright in her
video by both embedding it on its website and publishing a frozen still of the
video. She sought damages for EUR 1931 against the defendant, as well as award
of litigation costs.

The Swedish court stated at the
outset that the video is protected by Swedish copyright
law, and noted how the circumstance for which the claimant’s video was (and
still is) available on YouTube does not mean that no copyright infringement has
occurred. This is because the claimant had not authorised the publication of
the video on YouTube, nor - apparently - anywhere else on the internet.

Linking to unlicensed content

Considering whether the provision of
an embedded link to content whose publication on a third-party site (ie
YouTube) has not been authorised would amount to a copyright infringement, the court noted that there is no Swedish case law
regarding the question whether linking can be considered an act of communication to
the public [this
seems to suggest that, not only was the Svensson Swedish instalment eventually settled, but also the C More Swedish
proceedings were? Although C More was
about the right of making available to the public rather than communication to
the public, any decision by Swedish courts could have arguably provided some
guidance].

This said, the court referred to the InfoSoc
Directive and relevant CJEU case law on linking, notably Svensson and … GS
Media.

Extreme bungee jumping

In relation to the latter the court recalled
the presumption [iuris tantum, ie rebuttable]that the CJEU discussed at para 51 of the decision:

“when the
posting of hyperlinks is carried out for profit, it can be expected that the
person who posted such a link carries out the necessary checks to ensure that
the work concerned is not illegally published on the website to which those
hyperlinks lead, so that it must be presumed that that posting has occurred
with the full knowledge of the protected nature of that work and the possible
lack of consent to publication on the internet by the copyright holder. In such
circumstances, and in so far as that rebuttable presumption is not rebutted,
the act of posting a hyperlink to a work which was illegally placed on the
internet constitutes a ‘communication to the public’ within the meaning of
Article 3(1) of Directive 2001/29.”

According
to the court, it was “obvious” that L’Avenir had published the link to the
claimant’s YouTube video with the intention of pursuing a profit [yet the court did not really explain what
evidence supported the conclusion that in this case the defendant had a
profit-making intention]. According to the court, L’Avenir had not
been able to demonstrate that it had no knowledge of the unlicensed character
of the video embedded on its website. Hence, L’Avenir was found to have
infringed the claimant’s copyright by linking to the YouTube video without Ms
Jonsson’s permission.

The frozen still

Turning to the issue of the
reproduction of a frozen still [you click
on it, and the embedded video can be played] from the claimant’s video
on the L’Avenir website, the court ruled that this amounted to an infringement
of copyright for reproducing part of her work [when reading the judgment, I was a bit surprised not to see any
discussion of whether reproducing a single frame from a video could be regarded
as the reproduction of a protectable, ie sufficiently original, part of a work
(the whole video in this case) in at least an Infopaq
sense].

Finally, moral rights

The court
also ruled that, by failing to acknowledge the name of author of the video and
frozen still, the defendant had also infringed the claimant’s moral right of
attribution pursuant to section 3 of the Swedish Copyright Act.

Linking gone wrong:trying to escape liability

Comment

The judgment can now be appealed, and it will be interesting
to see whether L’Avenir decides to do so.

Overall, the judgment seems to
adopt a fairly strict interpretation of GS Media.

First, it is unclear in what sense the defendant published
the link to the claimant’s work to pursue a profit. Although in favour of the
Swedish court’s approach there is the fact that the CJEU judgment is very
unclear on this point as well, it might appear that getting the label “profit-making
intention” is VERY easy and – with it – the presumption of knowledge and …
prima facie liability.

Secondly, the judgment does not contain any discussion of whether one or more copyright exceptions would apply to this case [news reporting? quotation? criticism/review?]. Yet, the CJEU in GS Media said that such considerations MUST be undertaken.

Thirdly, it is unclear both (1) whether the claimant
approached the defendant to notify it of the unlicensed nature of the YouTube
video and (2) whether the claimant asked YouTube to take down the video in the
first place.

The
latter point leads to a final question. On the one hand, it may seem that link providers are
seen and treated somewhat with suspicion: profit-making objectives may be often considered present, and - with them - the duty to make sure links are being
provided to licensed sources. On the other hand, copyright owners seem to enjoy
a more favourable treatment: in this case, it was not even required to discuss
whether the claimant had notified the defendant about the unlicensed nature of
the video linked to or even attempted to have the video taken down by YouTube [YouTube, not a
prima facie ‘rogue’ site].

But do copyright owners have any duty to police
what use is being made of their works, or can they just expect others to
behave in a way that is respectful of their rights? In this sense, an analogy
with trade mark law (and ‘genericide’) can be drawn. In his Opinion
in Backaldrin Österreich
The Kornspitz Company GmbH, C-409/12, Advocate General
Cruz Villalón had held the view that the owner of a trade mark is required to
be “vigilant with regard to the protection of his trade mark” [para
83]. Can the same be said also for copyright owners, or does such duty of
vigilance only apply to third parties, including link providers?

Eleonora
also analyzes the Digital Economy Bill 2016 (still at Committee stage), which
contains criminal liability, potentially a 10-year prison sentence for unauthorised
communication to the public ("does it apply even for a
trivial infringement?).

David
Brophy discusses this case, which dealt with jurisdiction over a UK/ EU
trademark infringement and passing-off dispute, when the damages incurred and
the acts of infringement took place in two different countries.

GuestKat Eibhlin
Vardy discusses this case in which the Ninth Chamber of the General Court of the
European Union dismissed the action for annulment of the Commission decision that
‘pay-for-delay’ agreements between Lundbeck and generic companies breach EU competition
rules.

PREVIOUSLY ON NEVER TOO LATE

Never
Too Late 118[week ending on Sunday 16 October] | Rome
Court of First Instance rules that copyright exceptions for news reporting and
criticism/review do not apply to entertainment TV programmes | It's a gas! The
Nobel Memorial Prize in Economics | Around the Brexit Blogs and Related Events
| Is there a competition law issue lurking on the horizon of cloud computing? |
Thursday Thingies | Do declarations of non-infringement work for trade mark
litigants? | A close look at survey methodology for proof of acquired
distinctiveness | BGH rules for patentees on appeal –
again| A croissant-doughnut by any other name| General Court confirms
that body-builder silhouette cannot be registered as a trade mark for
nutritional supplements| The proposed press publishers' right: is it really worth
all this noise? | Servier successful before
Henderson J in introducing defence based on the Department of Health's
prescribing/reimbursement practices | Can
the Curve combat piracy? | Academics
stress importance of preserving consistency and integrity of EU framework on
content monitoring

Never
too late 117[week ending on Sunday 9 October] | The Commission's DSMS and CJEU
case law: what relationship? | Generic marks as valuable commercial information
| Other people's computers | Compared to Svensson, GS Media is not that bad
after all | Introducing our new InternKats! | C-223/15: no EU-wide confusion,
no EU-wide injunction

Never too late 116[week
ending on Sunday 2 October] | Book
Review: WTO Dispute Settlement and the TRIPS Agreement | The IPKat team news:
new arrivals and farewells | Brexit - who has the power to change UK law? |
Book review: Computer Crimes and Digital Investigations | European business
urge continued UK involvement in UPC on eve of Competitiveness Council meeting
| Wednesday Whimsies | Book review: Global Governance of Intellectual Property
in the 21st Century

Never
too late 115[week ending on Sunday 25 September]| Book Review: Arnold reviews “Economic Approaches to Intellectual
Property” | The English approach to obviousness – It all depends on the
facts? | AIPPI Congress Report 3: Biosimilars – similar but
different? | AIPPI Congress Report 4: Lawyers who lunch – role of experts
in litigation and the EPO in the 21st Century | Law & Economics
– The Italian Edition | Friday Fantasies | Latest thoughts about Brexit and the
UPC | Eye ‘should’ve’ done that! – Specsavers nears approval to trade mark
single word “should’ve” & “shouldve” | A song of Ice and Ice | ChIPs Global
Summit Report 3: Congratulations – your patent has been allowed, when is it
finally final?

Tuesday, 25 October 2016

In the early 1980s, Mr Gerard van den Berg designed two chairs he named "Charly" and "Chaplin" (see images, but only briefly, otherwise your eyes might start to bleed). In 1988, he registered them as models under the Uniform Benelux Law on Designs and Models. In 1990 he assigned his copyrights in the chair designs to Montis Design BV. Now, at that time, the Uniform Law on Designs an Models contained a quite bizarre provision in its Article 21. It provided that designs could benefit both from the protection as registered models and from protection under copyright law if they have "outstanding artistic character", but

Cancellation of the filing of a design or model of outstanding artistic character or the extinction of the exclusive right derived from the filing of such a design or model entails the simultaneous extinction of the copyright relating to that design or model, provided that the two rights belong to the same person; that extinction will not however take place if the proprietor of that design or model submits, in accordance with Article 24, a special declaration seeking to maintain his Copyright.

In other words, to benefit from copyright protection, the author or his successor needed to file an explicit declaration (and pay a fee), generally before the five year term of protection as registered model expired. Montis and Mr van den Berg failed to file such declaration, and therefore both design and copyright protection in the Charly and Chaplin chair designs lapsed in the Benelux in 1993.

Needless to say, Article 21(3) Uniform Law on Designs and Models is contrary to Article 5(2) Revised Berne Convention, which provides that copyright must not be subject to any formality. Since Article 9(1) TRIPS Agreement requires that members of the WTO comply with Articles 1 to 21 of the Berne Convention, the Benelux countries were also in violation of the TRIPS Agreement. Having realized this, the governments of Belgium, the Netherlands and Luxembourg deleted Article 21(3) from the Uniform Law in 2003.

Montis' Charly chair

Problem for Montis, of course, was that at that time, its copyrights in the Charly and Chaplin chair designs in the Benelux had already lapsed for failure to file the maintenance declaration. So it sought to revive them. One argument was that the Term Directive (93/98/EEC) required that works be protected for life of the author plus 70 years, and "the terms of protection provided for in this [Term] Directive shall apply to all works and subject matter which are protected in at least one Member State, on [1 July 1995], pursuant to national provisions on copyright or related rights or which meet the criteria for protection under Directive 92/100/EEC". Directive 92/100/EEC (replaced by Directive 2006/115/EC) is, however, explicitly not applicable to buildings and to works of applied art (cf. Article 2(3)).

So Montis claimed that its copyright should be held to have been restored following the adoption of Directive 93/98, essentially because their extinction for lack of compliance with a formality was a violation of the Berne Convention and TRIPS Agreement. The Benelux Gerechtshof (Benelux Court of Justice) decided to refer to the Court of Justice the following question for a preliminary ruling:

Is the term of protection referred to in Article 10, in conjunction with Article 13(1), of Directive 93/98 applicable to copyright that was originally protected by national copyright law but which lapsed before 1 July 1995 on the ground that a formal requirement had not been satisfied (or was not satisfied in due time), more specifically because a maintenance declaration, as referred to in Article 21(3) of [the Uniform Law] had not been filed …?

Now that's a work of outstanding artistic character. I needed some eye bleach.

In its judgment of 20 October 2016 in case C‑169/15 the Court of Justice said no, basically. It observed that the use, in Article 10(2) Term Directive, of the present indicative tense in the wording of the two alternative conditions for the application of the terms of protection provided for in that directive, reveals that the aim was that legal effect should be given to the situation as existing precisely on 1 July 1995 and not on a date earlier than or later than that date. Consequently, if, because of the extinction of copyright pursuant to specific national legislation, prior to the date laid down in Article 13(1) Term Directive, that copyright was no longer protected on that date, under Article 10(2) Term Directive, the terms of protection laid down by that directive do not apply to the work concerned.

While it does indeed follow from Article 9(1) TRIPS Agreement that the European Union must comply with, inter alia, Article 5(2) Berne Convention, the TRIPS Agreement had entered into force only on 1 January 1995, in other words after both the date when Term Directive 93/98 was adopted and the date when that directive entered into force. In addition, under Article 65(1) TRIPS Agreement, the European Union was not obliged to apply the provisions of that agreement before 1 January 1996. There was therefore no obligation to restore lapsed copyrights and no need to interpret Article 10(2) Term Directive in the way suggested by Montis.

It should be obvious that the holding of this decision is rather narrow, as (deleted) Article 21 Uniform Law on Designs and Models is rather unusual. I am not aware of any other European country with a similar provision. Also note that Montis' best argument probably was the chair designs were protected under copyright law on 1 July 1995 in at least one Member State other than a Benelux country. It did make this argument, but too late according to the Hoge Raad der Nederlanden (see para. 26) and was not heard. Now, I don't mind hearing about these chairs, but if I ever have to see them again, I'm going to vomit.

Under the Rental and Lending Rights Directive, among
other things, broadcasting organisations have the exclusive right to authorise or prohibit the communication to
the public of their broadcasts in places accessible to the public against
payment of an entrance fee.

More specifically, Article
8(3) of that directive provides that:

"Member
States shall provide for broadcasting organisations the exclusive right to
authorise or prohibit the rebroadcasting of their broadcasts by wireless means,
as well as the communication to the public of their broadcasts if such
communication is made in places accessible to the public against payment of an
entrance fee."

Are hotel rooms included in the notion of "places accessible to the public against payment of an
entrance fee"?

This is the issue on which
the Handelsgericht Wien (Commercial
Court, Vienna) is seeking guidance from the Court of Justice of the European
Union (CJEU) in Verwertungsgesellschaft Rundfunk GmbH
v Hettegger Hotel Edelweiss GmbH, C-641/15.

This morning Advocate General (AG) Szpunar in his Opinion answered the question in the
negative, holding that "the communication of a
television or radio signal through television sets installed in hotel rooms
does not constitute communication to the public of the broadcasts of
broadcasting organisations in a place accessible to the public against payment
of an entrance fee within the meaning of that provision."

Background

This reference for a preliminary ruling has been
made in the context of litigation between the operator of a hotel in Grossarl [whose
rooms, unsurprisingly, are furnished with TV sets which enable broadcasts from
a variety of broadcasters to be received by means of a communal aerial
belonging to the hotel]and an Austrian collecting society, over the former's refusal to pay
relevant fees pursuant to the national implementation of Article 8(3) of the
Rental and Lending Rights Directive.

According to the hotel
operator, hotel rooms are not places accessible to the public against
payment of an entrance fee within the meaning of the provisions transposing
Article 8(3) of the Rental and Lending Rights Directive.

The Commercial Court, Vienna, was
not sure about the correct interpretation of Article 8(3) of that directive,
and so asked the CJEU the following:

"Is the
condition of “against [payment] of an entrance fee” laid down in
Article 8(3) of Directive [2006/115] satisfied where;

– through
the TV set made available in each room of a hotel, the hotel operator provides
access to the signal for various television and radio channels (“hotel room
TV”), and

– for
use of the room (including hotel room TV), the hotel operator charges a fee per
room per night (room rate) which also includes use of the TV set and the
television and radio channels to which access is thereby provided?"

Hotel life: not all about TV

The AG Opinion

In order to address
the question referred by the Austrian court, AG Szpunar addressed in turn the
notions of 'communication to the public' and ‘places accessible to the
public against payment of an entrance fee’.

While holding the view that the
provision of a TV or radio signal by means of TV sets installed in hotel rooms
must be regarded as falling within the notion of ‘communication to the public’,
the AG concluded for the inapplicability of Article 8(3) of the Rental and
Lending Rights Directive to the case at hand.

The notion of
'communication to the public'

The AG noted that the CJEU has already
ruled that installing TV sets in hotel
rooms and providing a television signal via them constitutes communication to
the public within the meaning of both Article 3(1) of the InfoSoc
Directive [Rafael Hoteles] and Article 8(2) of the Rental and Lending Rights
Directive [PPI (Ireland), noted here].

However the object and
scope of protection laid down in those provisions is different from that in
Article 8(3) of the Rental and Lending Rights Directive. In particular,
for a broadcast to exist it requires an airing and thus a form of communication
to the public. Therefore, unlike in the case of works or performances or
recordings thereof, communication to the public is not only one of the
forms of using broadcasts but also an inherent element of the actual object of
protection [para 15].

Despite the particular nature of
radio and TV broadcasts, the AG rejected the idea [para 16] that the term
'communication to the public' in the context of providing a signal for TV
sets installed in hotel rooms should be given a different meaning. He thus concluded the provision of
a TV or radio signal by means of TV sets installed in hotel rooms must be
regarded as communication to the public of broadcasts from broadcasting
organisations within the meaning of Article 8(3) of the Rental and Lending
Rights Directive.

This said, he noted however [para 17] that "the EU
legislature limited the exclusive right of broadcasting organisations to cases
of communication to the public in places accessible to the public against
payment of an entrance fee."

The notion of ‘places accessible
to the public against payment of an entrance fee’

Turning to the consideration
whether hotel rooms are to be regarded as ‘places accessible to
the public against payment of an entrance fee’, the AG stated that the answer
could be in the affirmative ... but only if one considered "the actual expression ‘places accessible to the public
against payment of an entrance fee’, in isolation from the drafting history,
purpose and role of Article 8(3) of [the Rental and Lending Rights
Directive] in the system of copyright and related rights" [para 19].

History and rationale of the
provision

If one takes instead into account
the drafting history of the Rental and Lending Rights Directive, the conclusion
is rather different.

The AG recalled [para 22] that Article
8(3) was modelled on Article 13(d) of the Rome Convention
and intended to have the same scope. In the Rome Convention the notion of ‘places
accessible to the public against payment of an entrance fee’ is that of places
"where a fee is levied precisely for the
possibility of viewing a television broadcast communicated to the public at
that place" [para 24]. The reason is that
Article 13(d) in the Rome Convention was linked to the practice, which was
common in an earlier period of television development, of organising collective
showings of television broadcasts, entry to which was subject to a fee. Accordingly, [para 25] when we not are
dealing with a fee directly linked to the possibility of viewing a television
broadcast, and fees are merely being levied for other services, such as
catering services, that situation does not fall within the scope of the term
‘places accessible to the public against payment of an entrance fee’ within the
meaning of Article 13(d) of the Rome Convention."

Buying a beer: NOTa mandatory fee to watch sports on TV

The AG concluded [para 26] that "a fee
for a room in a hotel is not a fee for the possibility of viewing television
broadcasts there, but for accommodation. Making television broadcasts available
is merely an additional service which a customer expects, in the same way as
running water, drinks and an internet connection."

The AG also rejected the argument
that the accessibility of TV set in a room makes it possible to raise the
price of the accommodation and consequently part of that price must be regarded
as a fee for the possibility of viewing TV broadcasts. To explain this point,
the AG drew an analogy with catering establishments and held that [para 30] "[t]he owner of a
catering establishment fitted with a television set can also raise the price of
his services by dint of that fact, particularly during the broadcasting of
programmes of particular interest to the public, such as sports broadcasts. It
should be recalled that ordering a place at a table in that establishment will
not normally be possible without ordering the food or drink on offer there.
That does not mean, however, that the price of a glass of beer can be regarded
as a fee for viewing that broadcast and the establishment can be regarded as
accessible to the public against payment of an entrance fee within the meaning
of Article 13(d) of the Rome Convention. A fee for an accommodation
service in a hotel room is precisely the same in nature."

Also applicable under current
technical and market conditions

The AG held that such a conclusion
based on the history and rationale of the Rome Convention would be also
applicable in today's conditions.

While "a dynamic interpretation of the
provisions of law, which is capable of adapting the wording thereof to the
changing conditions in fact and thus allowing the objective sought by those
provisions to be attained" is necessary [para 35],
the AG concluded that no change is needed regarding the interpretation of
Article 8(3) of the Rental and Lending Rights Directive. This is so because:

Public
showings of TV broadcasts have not disappeared;

"[A] dynamic interpretation of the provisions of law is
justified only on condition that it takes account of the objective which
the legislature sought to attain in laying down those provisions and
serves to realise that objective in changed conditions, but not to replace
it with another objective." [para 37]

Comment

This is another carefully drafted and thoughtful
opinion of AG Szpunar which bears signifcant points of resemblance with the
approach taken in his earlier Opinion in Vereniging Openbare Bibliotheken v Stichting Leenrecht, C-174/15 [noted here].

Readers will recall that this
reference from The Netherlands [in progress] has arisen in the context of proceedings brought by the
association of Dutch public libraries which, contrary to the position of Dutch
government, believes that libraries should be entitled to lend electronic books
included in their collections according to the principle "one copy one
user".

Similarly to today's Opinion, also
there AG Szpunar stressed the importance of interpreting relevant provisions of
EU law in light of their history and rationale, but also - in order to maintain
the latter unaltered over time – the need to adopt a dynamic
interpretation of legal norms, if changes in circumstances and technology
require so.

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